Search the MLS for Active Adult Homes in Monmouth County, by Bunny & Art. (732) 598-7700

Don’t Tell Me There’s Another Bubble Coming

If you are reading this, the odds are real good that you remember the housing bubble. You know, the time in the mid 2000s where home prices climbed very fast and high. And then came the crash. And, for the most part, the housing industry has recovered from the bubble.

In my humble opinion, the whole situation came about because it became too easy to get a mortgage. It seemed that if you had a decent (not great, not good) credit score and if you could make a mirror fog up, you could get a mortgage. My son was 19, working as a waiter while going to college. He was qualified for a mortgage in the amount of $900,000! Why? He had a good credit score.

Some of the mortgage programs available were stated income, no income verification, no document loans, and my favorite – the under market rate interest, with interest only payments and negative amortization. All of this combined with a five, seven or ten year balloon. The bulk of these went into foreclosure when the balloon payment became due. But people took these mortgages because housing prices were going up and they thought they could sell at a huge profit or refinance. And they were wrong.

If you would like to read more about the housing bubble of the mid 2000s, visit our web site, www.55PlusInMonmouth.com/blog/ and read some prior posts.

After the housing market crashed, lending requirements became much more stringent. But now, the requirements to qualify for a mortgage are lessening. The average credit score of borrowers is falling. More programs are available that require less than the traditional 20% down payment than ever. And more buyers than ever are taking advantage of these programs.

But the current lending standards are still much more stringent than they were in the mid 2000s. And the fact that it is a little easier to get a mortgage is a good thing. As long as it does not get too much easier.

So if you want to get one of these easier mortgages and purchase a home, give us a call. Call Bunny and Art Reiman – Realtors at 732-616-6226